The yield on the 10-year Treasury bond fell to 2.86%, from the 2.88% posted late Monday, while the five- year Treasury note fell to 1.505%.

And the yield on the 30-year Treasury bond surrendered earlier gains, falling to 3.887%.

It was a busy day for data. The consumer price index for November was unchanged versus expectations for a rise of 0.1% on the month. Excluding food and energy, the index gained 0.2%, slightly more than expected. In a separate report, the current account gap narrowed to $94.8 billion in the third quarter, the lowest level since 1998.

The National Association of Home Builders’ housing market index for December jumped to 58 from 54 in November, trumping expectations for a small rise to 55.

And in Washington, D.C., a bi-partisan budget deal received Senate approval.

The budget vote and various data reports arrive as Fed officials gathered for their December policy meeting,s et to start at 12:30 ET today.

Analysts and investors are waiting to see if and how the central bank could begin scaling back its bond-buying stimulus. Most market participants expect the Fed to put the so-called taper on hold until next year.

But pundits also see the Fed moving to clarify its policies on how it will exit the program.

“Right now, it is a matter of when, not if…The market has had time to price it (tapering) in.”

Spencer Jakab, the man who pens “Ahead of the Tape” for the WSJ, expressed a similar sentiment in today’s column, arguing that smart investors are more concerned about the Fed’s forward guidance.

Brandywine’s McIntrye, puts it this way:

[The Fed] has to send a clear message that taper does not mean tightening. They have to make it known that they will still maintain accommodative fiscal policy…The forward guidance need to have an accommodative tone.

Amey Stone is Barron’s Income Investing blogger and Current Yield columnist. She was formerly a managing editor at CBS MoneyWatch, MSN Money and AOL DailyFinance. Her responsibilities included overseeing market coverage and personal finance topics. Prior to those roles, she was a senior writer at BusinessWeek where she authored the Street Wise column online and contributed to the magazine’s Inside Wall Street column. Topics covered included economics, corporate finance, Fed policy, municipal bonds, mutual funds and dividend investing. She co-authored King of Capital, a biography of Citigroup Chairman Sandy Weill. She is a graduate of Yale University and Columbia University’s Graduate School of Journalism.